Retail News Update

Austalian Coffee chain Gloria Jean’s has entered into a master franchisee agreement with Citymax India, a part of the $2-billion, Dubai-based retail giant Landmark Group, to set up 500 coffee outlets in India in the next 10 years.

The first outlet is expected to open in Lokhandwala, Mumbai by February 2008, to be followed by one in New Delhi in June.

The company has plans to invest Rs 40 crore to set up around 90 Gloria Jean’s outlets in the next four years, including standalone outlets, kiosks, co-branded parlours and company-owned outlets across the country.

Citymax India is also looking at opening Gloria Jean’s coffee parlours in airports and hospitals. The company is soon opening an outlet at Singapore’s Changi International airport.

Given the high rental costs in India, Citymax expects to break even only in the fifth year as against the global average of three years. The company would consider smaller towns as well. “Smaller cities are very attractive for us as they offer much lower rental costs. We are considering getting into cities like Chandigarh, Ludhiana and Goa that have a distinct lifestyle of their own,” Tony White, regional development manager, Gloria Jean’s Coffees, told Hindustan Times.

Currently, India has about 1,200 coffee parlours and 800 kiosks, a number that is expected to double in the next five years. “The coffee retail business in India generates about Rs 500-600 crore a year and is growing at a rate of 12-15 per cent annually,” said Ravi Saxena, managing director, Citymax India. Citymax India will give out franchisees of Gloria Jean’s to other vendors as well.

“We are not a premium brand and our prices will be competitive. However, our offerings will be prepared by trained professionals,” said Troy Franklin, regional general manager, Gloria Jean’s Coffees.

Gloria Jean’s is also setting up a coffee university in Mumbai to train employees in coffee brewing.